Cryptocurrency

Description

GS PAPER II: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Context: Ethereum founder has donated over $1 billion in cryptocurrency to support India’s COVID-19 relief efforts, making it one of the largest philanthropic activities by a single person.

Ether is a popular digital currency, and it’s accepted in the Ethereum network.
The Ethereum network uses blockchain technology to create an open-source platform for building and deploying decentralized applications.

What is Cryptocurrency?

A cryptocurrency is a digital or virtual currency that is meant to be a medium of exchange.
- Cryptography is a method of using encryption and decryption to secure communication in the presence of third parties with ill intent.
It is quite similar to real-world currency, except it does not have any physical embodiment, and it uses cryptography to work.
Because cryptocurrencies operate independently and in a decentralized manner, without a bank or a central authority, new units can be added only after certain conditions are met.
For example, with Bitcoin, only after a block has been added to the blockchain will the miner be rewarded with bitcoins, and this is the only way new bitcoins can be generated. The limit for bitcoins is 21 million; after this, no more bitcoins will be produced.